IBI-Rating has upgraded the credit rating of JSC «BANK CREDIT DNEPR» to uaA grade; the rating outlook is «evolving»

Rating agency IBI-Rating informs on upgrading of the credit rating of JSC «BANK CREDIT DNEPR» to uaA grade; the rating outlook is «evolving». The rating of bank deposit reliability has been affirmed at «4+» grade (high reliability).

JSC «BANK CREDIT DNEPR» has been operating in the banking market since July 1993. According to the classification of the National Bank of Ukraine, the bank is in the group of banks with private capital and as at the beginning of October 2019, ranked the 21st by assets among the 76 banks of Ukraine. The only one shareholder of the bank is the «Brancroft Enterprises Limited», which indirectly belongs to Victor Pinchuk. The bank's regional network is represented by 36 branches in 8 oblasts of Ukraine. The bank has a sufficiently large base of clients, a well-developed infrastructure of card business services. During the analyzed period, the bank actively developed hryvnia retail lending and lending of agribusiness clients.

During the analyzed period, the bank modified and submitted to the National Bank of Ukraine the updated Capitalization/Restructuring Plan of JSC «BANK CREDIT DNEPR» for the period till the end of September 2020 (in order to implementation the requirements of the regulator's decision on the basis of the assessment of the stability of banks and the banking system in 2019). Through to the measures taken by the shareholders and the bank's management, as of December 27, 2019, the regulatory capital was increased to the amount of UAH 1.28 billion, and the calculated value of the capital adequacy ratio (H2) reached 20%. Thereafter, there was a further improvement of liquidity ratios and an increase of the highly liquid component of assets.

The main indicators of JSC «BANK CREDIT DNEPR» performance are kept positive dynamics compared to previous years and depend significantly on the quality of assets and the results of trading operations. In particular, the realization of bad debt on individual large loans affected a significant increase in revenues and helps to disperse the share of reserves which, in turn, affected on net operating income in the amount of UAH 690 million based on the results by 11 months of 2019, as well as net profit in the same period of nearly UAH 95 million. The Rating Agency positively estimates the process of existing and prospective increase of capitalization, which in the background of reduction of non-working assets should in the near future help to further improve the performance indicators.

The upgrading of the credit rating grade of JSC «BANK CREDIT DNEPR» is due to improvement of liquidity and capitalization indicators, which was achieved due to the financial support of the owner of the banking institution in the framework of the implementation of the capitalization/restructuring program; positive dynamics of retail lending and lending to clients in the agro-industrial sector; acceptable diversification of the resource base, as well as the gradual decline in non-performing assets. At the same time, the Rating Agency notes that the concentration of the client's loan portfolio by major borrowers is maintained, a significant portion of the overdue debt on the clients' loans, as well as the incomplete balance of assets and liabilities to maturity. In turn, it should be noted that the bank has a significant amount of sufficiently stable funds attracted from the companies, which are recognized as related to the bank, in accordance with the requirements of the regulatory acts of the NBU, what having a positive impact on the liquidity of the institution.

In order to conduct the analytical research the materials provided by JSC «BANK CREDIT DNEPR» have been used, including: annual financial statements for 2016-2018 and 11 months of 2019, target performance indicators, other necessary internal information, as well as the information from the public sources, which the Rating agency considers credible.

Finance department
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